BUSINESS STATISTICS - ASSIGNMENT –IV (UNIT-IV)

Name of Student: Ujwal Mahendra Khanapurkar.

Roll no:
Reg. No: 31-1183.
Specialization: Operations and Supply Chain Management.
Batch: 2020-2022.
Institute: Balaji Institute of Management and Human
Resource Development.
Semester: 1st Semester.
Subject Name: Business Statistics.
Assignment No: 4
Submission Date: 27-11-2020.
Total no. of pages written: 16.
Q1. The life of a certain type of electronic component is normally distributed with mean= 220 hours
deviation of 25 hours. Do you agree that the probability that the mean life of sample of 20 components
will be greater than 225 hours will be higher than probability that the mean life of a sample of 40
components will be greater than to 225 hours? Show by calculations.
Answer:
μ = 220hours, σ =25hours, P ( x́>225 ),
For P ( x́=225 )
n = 20
σ 25
SE X́ = = =5.5901
√ n √ 20
x́ −μ 225−220
Z= = =0.89
SE X́ 5.5901

P ( x́=225 )=0.3133
P ( x́>225 )=0.5−0.3133=0.1867
P ( x́>225 )

For, P ( x́=225 )
n = 40
σ 25
SE X́ = = =3.9528
√ n √ 40
x́ −μ 225−220
Z= = =1.26
SE X́ 3.9528

P ( x́=225 )=0.3962
P ( x́>225 )=0.5−0.3962=0.1038

Yes, the probability that the mean life of sample of 20 components will be greater than 225 hours will be
higher than probability that the mean life of a sample of 40 components will be greater than to 225 hours.
Q2. An orange juice producer buys all oranges from a large Orange groove. The amount of juice
squeezed from each orange is approximately normally distributed with mean of 4.70 ounces and a
standard deviation of 0.40 ounces.
(a) What is the probability that randomly selected Orange will contains between 5 and 5.50 ounces?
(b) Between what two values (in ounces) symmetrically distributed around the population mean will
80% of oranges fall?
(c) Suppose a sample of 25 oranges is selected. What is the probability that the sample mean will be at
least 4.60 ounces?
Answer:
(a) μ = 4.70ozs, σ = 0.40ozs, P ( 5≤ x́ ≤ 5.50 )
For, P ( x́=5 )
x́ −μ 5−4.70
Z= = =0.75
σ 0.40
P ( x́=5 )=0.2734

For, P ( x́=5.5 )
x́ −μ 5.5−4.70
Z= = =2
σ 0.40
P ( x́=5.5 )=0.4772
∴ P ( 5 ≤ x́ ≤ 5.50 )=P ( x́=5.5 )−P ( x́=5 ) =0.4772−0.2734=0.2038

∴ The probability that randomly selected Orange will contains between 5 and 5.50 ounces is 0.2038
(b)If 80% is symmetrically divided around, the mean 40% is on each side.
∴ P ( x )=0.4 → Z=± 1.29
x −μ x−4.7
Z= = =± 1.29
σ 0.4
∴ x=[ ( ±1.29 )∗( 0.4 ) ]+ 4.7

∴ x=5.216∧x=4.184

∴ x ranges from 4.184ounces to 5.216ounces symmetrically distributed around the population mean will
80% of oranges fall
(c) n = 25oranges, P ( x́ ≥ 4.60 )
σ 0.40
SE X́ = = =0.08
√ 25 5
x́ −μ 4.6−4.7
Z= = =−1.25
SE X́ 0.08

P ( x́=4.6 )=0.3944
P ( x́> 4.6 )=0.5+0.3944=0.8944
∴The probability that the sample mean will be at least 4.60 ounces is 0.8944.
Q3. For a random sample of size 30 from a population with mean of 205 and standard deviation of 25,
what is the probability that the sample mean will be: -
(a) Greater than 210?
(b) Less than 200?
(c) Between 190 and 200?
(d) Either less than 210 or more than 220?
Answer:
μ = 205, σ = 25, n = 30
(a) Greater than 210
P ( x́>210 )

For, P ( x́=210 )
σ 25
SE X́ = = =4.5644
√ n √ 30
x́ −μ 210−205
Z= = =1.09
SE X́ 4.5644

P ( x́=210 )=0.3621
P ( x́>210 )=0.5−0.3621=0.1379
∴ The probability that the sample mean will be greater than 210 is 0.1379
(b) Less than 200
P ( x́<200 )
For, P ( x́=200 )
σ 25
SE X́ = = =4.5644
√ n √ 30
x́ −μ 200−205
Z= = =−1.09
SE X́ 4.5644

P ( x́=200 )=0.3621
P ( x́<200 )=0.5−0.3621=0.1379

∴ The probability that the sample mean will be less than 200 is 0.1379
(c)Between 190 and 200,
P ( 190≤ x́ ≤ 200 )
For, P ( x́=190 )
x́ −μ 190−205
Z= = =−3.28
SE X́ 4.5644
P ( x́=190 )=0.49948

For, P ( x́=200 )
x́ −μ 200−205
Z= = =−1.09
SE X́ 0.40

P ( x́=200 )=0.3621
∴ P ( 190 ≤ x́ ≤ 200 )=P ( x́=190 )−P ( x́=200 ) =0.49948−0.3621=0.13738

∴ The probability that the sample mean will be between 190 and 200 is 0.13738
(d) Either less than 210 or more than 220,
P ( x́<210 )
For, P ( x́=210 )
σ 25
SE X́ = = =4.5644
√ n √ 30
x́ −μ 210−205
Z= = =1.09
SE X́ 4.5644

P ( x́=210 )=0.3621
P ( x́<210 )=0.5+0.3621=0.8621
P ( x́>220 )
For, P ( x́=220 )
σ 25
SE X́ = = =4.5644
√ n √ 30
x́ −μ 220−205
Z= = =3.28
SE X́ 4.5644

P ( x́=220 )=0.49948
P ( x́>220 )=0.5−0.49948=0.00052

For, P ( x́<210 )∨P ( x́ >220 )=P ( x́ <210 )+ P ( x́ >220 )=0.8621+0.00052=0.86262

∴ The probability that the sample mean will be either less than 210 or more than 220 is 0.86262

Q4. Give a population each of whose elements falls in one of the two categories, known as success and
failure respectively where probability of success is 0.4. From this population of size 600 is taken.
(a) What is the expected number of success?
(b) What is the expected value and standard error of the distribution of proportion of success?
(c) What is the probability that the proportion of success in the sample will be at most 0.43?
(d) What is the probability that the percentage of failure in the sample will be 55 and 65?
Answer:
(a)What is the expected number of success
Sample size n = 600
Probability of success = proportion of success = π = 0.4
Expected number of success = μ = n * π = 0.4 * 600 = 240
(b) What is the expected value and standard error of the distribution of proportion of success
Expected value of the distribution of success = π = 0.4
π∗( 1−π ) 0.4∗( 1−0.4 )
Standard error of distribution of success ¿ SE p=
√ n
=
√ 600
=0.02

(c) What is the probability that the proportion of success in the sample will be at most 0.43?
P (p ≤ 0.43)
For, P (p = 0.43)
p−π 0.43−0.4
Z= = =1.5
π∗( 1−π ) 0.4∗( 1−0.4 )
√ n √ 600
P (p = 0.43) = 0.4332
∴ P (p ≤ 0.43) = 0.5 + 0.4332 = 0.9332

∴ Probability of proportion of success in the sample will at most be 0.43 is 0.9332.

(d) What is the probability that the percentage of failure in the sample will be 55 and 65?
π = 0.6, P (0.55 ≤ p ≤ 0.65), P (p = 0.55)
p−(1−π ) 0.55−(0.6)
Z= = =−2.5
π∗( 1−π ) 0.6∗( 1−0.6 )
√ n √ 600
P (p = 0.55) = 0.4938
P (p = 0.65)
p−π 0.65−(0.6)
Z= = =2.5
π∗( 1−π ) 0.6∗( 1−0.6 )
√ n √ 600
P (p = 0.65) = 0.4938
∴ P (0.55 ≤ p ≤ 0.65) = P (p = 0.55) + P (p= 0.65) = 0.4938 + 0.4938 = 0.9876
∴ Probability that the percentage of failure to remain between 55 and 65 is 0.9876

Q5. Long distance telephone calls are normally distributed with the σ= 3 minutes.
(a) Obtain a 90% confidence interval for the population mean, µ if a random sample of 24 calls was
found to have mean = 7.8 minutes.
(b) Obtain a 96% confidence interval for the population mean, µ if a random sample of 240 calls was
found to have mean = 7.8 minutes.
Answer:
σ = 3minutes,
(a)Obtain a 90% confidence interval for the population mean, µ if a random sample of 24 calls was found to
have mean = 7.8 minutes.
n = 24calls
x́=7.8 minutes
For, 90% of confidence level.
1 – α = 90%
α = 10% = 0.10
α/2 = 5% = 0.05
Z α =±1.65
2
σ 3
SEx́ = = =0.6124
√ n √ 24
x́− Z α ∗SE x́ < μ < x́+ Z α ∗SEx́ =7.8−[ 1.65∗0.6124 ] <7.8+ [ 1.65∗0.6124 ]
[ 2 ] [ 2 ]
∴ 6.790< μ<8.811
∴ The 90% confidence interval for μ = 24 is (6.790, 8.811)
(b) Obtain a 96% confidence interval for the population mean, µ if a random sample of 240 calls was found
to have mean = 7.8 minutes.
n = 240calls,
x́=7.8 minutes,
For, 96% of confidence level.
1 – α = 96%
α = 4% = 0.40
α/2 = 2% = 0.02
Z α =±2.06
2
σ 3
SEx́ = = =0.1936
√ n √ 240
x́− Z α ∗SE x́ < μ < x́+ Z α ∗SEx́ =7.8−[ 2.06∗0.1936 ] <7.8+ [ 2.06∗0.1936 ]
[ 2 ] [ 2 ]
∴ 7.3955< μ <8.2045

∴ The 96% confidence interval for μ = 240 is (7.3955, 8.2045).

Q6. In an automatic self-safety test conducted by a safety Research Centre, the average tyre pressure in a
sample of 102 Tyres was found to be 26 Pounds per square inch and the standard deviation was 2.62
Pounds per square inch.
(a) What is estimated standard deviation of the population (population consists of 40 million tyres).
(b) Calculate the standard error of the mean.
(c) Calculate a 92% confidence interval for population mean
Answer:
S = 2.62, x́=26, n = 102
(a)What is estimated standard deviation of the population (population consists of 40 million tyres).
σ =SE x́∗ √ n
S 2.62
SEx́ = = =0.259
√ n √ 102
∴ σ=0.259∗√ 102=2.62
∴ Estimated standard deviation of the population is 2.62
(b)Calculate the standard error of the mean.
S 2.62
SEx́ = = =0.259
√ n √ 102
∴ The standard error of the mean is 0.259
(c)Calculate a 92% confidence interval for population mean
Case 3: For, 92% of confidence level.
1 – α = 92%
α = 8% = 0.80
α/2 = 4% = 0.04
Z α =±1.76
2

x́− Z α ∗SE x́ < μ < x́+ Z α ∗SEx́ =26−[ 1.76∗0.259 ] < μ<26+ [ 1.76∗0.259 ]
[ 2 ] [ 2 ]
25.54416< μ<26.45584

∴ 92% confidence interval for population mean is (25.54416, 26.45584)

Q7. A manufacturing company produces electric insulation if the insulators break when in use, a short
circuit is likely to occur. To test the strength of the insulator, destructive testing in high-powered lab is
carried out to determine how much force in pound is required to break the insulators. It is desired to
estimate the population mean force needed to break the insulator to within ±25 pounds of the true value
with 90% level of confidence. On the basis of study taken in the previous year, the standard deviation is
believed to be 120 pounds. What sample size is needed? What sample size is needed if the level of
confidence is to 95%?
Answer:
For, 90% of confidence level.
1 – α = 90%
α = 10% = 0.10
α/2 = 5% = 0.05
Z α =±1.65
2
E = 25
Z α 2∗σ 2
1.652∗1202
n= 2 2 = =62.7264 ≅ 63
E 25 2

∴ The sample size is needed for 90% of confidence level is 63

For, 95% of confidence level.
1 – α = 95%
α = 5% = 0.05
α/2 = 2.5% = 0.025
Z α =±1.96
2

Z α 2∗σ 2
2 1.962∗1202
n= = =88.5104 ≅ 89
E2 25 2
∴ The sample size is needed for 95% of confidence level is 89.

Q8. A bank officer wants to determine the amount of average total monthly deposit per customer at the
bank. He believes on estimate of this average amount using a confidence interval is sufficient. How large
a sample should he take to be within 300 rupees of actual average with 99% confidence? He assumes
standard deviation of monthly deposit for all the customers is about 1200 rupees?
Answer:
σ = 1200rupees.
E = 300rupees.
For, 99% of confidence level.
1 – α = 99%
α = 1% = 0.01
α/2 = 0.5% = 0.005
Z α =±2.58
2

Z α 2∗σ 2
2 2.582∗12002
n= = =106.5024 ≅107
E2 300 2
∴ The sample size he would take to be within 300 rupees of actual average with 99% of confidence level is
107.
Q9. At a Palika car parking lot, 42 cars out of total 150 selected at random were found to be white.
(a) Obtain a point estimate of the proportion of white car in the city and a 98% confidence interval of
proportion?
(b) How large a sample would be needed to estimate the proportion of white cars within ±0.08 of the true
proportion at 90% confidence level?
(c) How large a sample would be needed to estimate the proportion of white cars within ±0.04 of the true
proportion of 95% confidence level?
Answer:
(a)Obtain a point estimate of the proportion of white car in the city and a 98% confidence interval of
proportion?
p = 42/150 = 0.28
p∗( 1− p ) 0.28∗( 1−0.28 )
SE p=
√ n √
=
150
For, 98% of confidence level.
=0.0367

1 – α = 98%
α = 2% = 0.02
α/2 = 1% = 0.01
Z α =±2.33
2

p− Z α ∗SE p <π < p+ Z α ∗SE p =0.28−[ 2.33∗0.0367 ] < π < 0.28+ [ 2.33∗0.0367 ]
[ 2 ] [ 2 ]
0.194489< π <0.365511

∴ The point estimation is p = 0.28 and the 98% confidence interval of proportion for white cars is (0.194489,
0.365511)
(b)How large a sample would be needed to estimate the proportion of white cars within ±0.08 of the true
proportion at 90% confidence level?
For, 90% of confidence level.
1 – α = 90%
α = 10% = 0.10
α/2 = 5% = 0.05
Z α =±1.65
2

0.28∗( 1−0.28 )
E=Z α ∗SE p =1.65∗
2
2
√ n
=0.08

n= ( 1.65
0.08 )
∗0.2016=85.75875 ≅ 86 cars

∴ Sample size needed to estimate the proportion of white cars within ±0.08 of the true proportion at 90%
confidence level is 80cars.
(c)How large a sample would be needed to estimate the proportion of white cars within ±0.04 of the true
proportion of 95% confidence level?
For, 95% of confidence level.
1 – α = 95%
α = 5% = 0.05
α/2 = 2.5% = 0.025
Z α =±1.96
2

0.28∗(1−0.28 )
E=Z α ∗SE p =1.96∗
2
2
√ n
=0.04

n= ( 1.96
0.04 )
∗0.2016=484.04 ≅ 484 cars
∴ Sample size needed to estimate the proportion of white cars within ±0.04 of the true proportion at 95%
confidence level is 484cars.

Q10. Johnson's machine company has a contract with one of its customers to supply machine pump gears.
One requirement is that diameter of its gear be within specific limits. Here are the diameters in (inches)
of a sample of 20 gears.
4.01 4.00 4.02 4.20 4.03 4.00 3.98 3.99 3.99 4.01
3.99 3.98 3.97 4.00 4.02 4.01 1.02 4.00 4.01 3.99
What can John say to its customer about the diameters of 95% of the gears they are receiving?
Answer:
Σx 80.22
n = 20, x́= = =4.011
n 20
x x−x́ ( x−x́ )2
4.01 -0.001 0.000001
4.00 -0.011 0.000121
4.02 0.009 0.000081
4.20 0.189 0.035721
4.03 0.019 0.000361
4.00 -0.011 0.000121
3.98 -0.031 0.000961
3.99 -0.021 0.000441
3.99 -0.021 0.000441
4.01 -0.001 0.000001
3.99 -0.021 0.000441
3.98 -0.031 0.000961
3.97 -0.041 0.001681
4.00 -0.011 0.000121
4.02 0.009 0.000081
4.01 -0.001 0.000001
4.02 0.009 0.000081
4.00 -0.011 0.000121
4.01 -0.001 0.000001
3.99 -0.021 0.000441
 2
Σx=80.22 Σ ( x −x́ ) =0 Σ ( x −x́ ) =0.04218
2
Σ ( x− x́ )
S=
√ n−1
S 0.04712
=
0.04218
√( 19 )
=0.04712

SEx́ = = =0.01054
√n √ 20
For, 95% of confidence level.
1 – α = 95%
α = 5% = 0.05
α/2 = 2.5% = 0.025
df = n – 1 = 20 – 1 = 19
t α =±2.093
2

x́− t α ∗SE x́ < μ< x́ + t α ∗SE x́ =4.011−[ 2.093∗0.01054 ] < μ< 4.011+ [ 2.093∗0.01054 ]
[ 2 ] [ 2 ]
3.9889< μ< 4.0331

∴ John can say that 95% of the gear consumer are receiving will have diameter range as (3.9889, 4.0331)